Can An Employer Of Record (EOR) Help Your Company Save Costs On International Hiring?
Increasing the size of your workforce abroad can be a calculated strategic decision in today’s globalised business environment to gain access to top talent. On the other hand, handling the legal requirements, payroll, and benefits administration involved in international hiring can be difficult and costly.
This is where a global Employer of Record (EOR) can offer significant cost savings for your company.
What is an EOR?
Your international workforce’s legal employer is a third-party organisation called an EOR. They take care of all the HR, payroll, tax, and compliance duties to meet your hiring needs so you can concentrate on running and growing your business.
How Can an EOR Save You Money?
- Eliminates the Need for Setting Up Legal Entities: Establishing a legal entity in a foreign country can be a lengthy and costly process. By taking on the associated costs and administrative burden and functioning as the legal employer, EORs eliminate this need.
- Reduces HR and Payroll Costs: Managing HR and payroll for international employees can be complex due to varying labor laws, tax regulations, and benefits requirements. EORs manage all of these facets, sparing you the expense of employing in-house HR and payroll personnel or contracting out these functions.
- Mitigates Risks and Costs of Misclassification: Misclassifying employees can lead to legal disputes, fines, and reputational damage. EORs guarantee accurate categorization, reducing these risks and related expenses.
- Provides Cost-Effective Benefits Solutions: EORs often have access to group benefits plans that are more affordable than individual plans, allowing you to offer competitive benefits to your international employees without breaking the bank.
- Streamlines Recruitment and Onboarding Processes: EORs can help streamline the recruitment and onboarding processes, saving you time and resources. This allows you to quickly bring new employees onboard and start realizing their value.
- Negotiates Competitive Rates: EORs often have established relationships with local vendors and service providers, allowing them to negotiate better rates for their clients on various services, such as office space, equipment, and software.
- Provides Local Expertise: EORs have local expertise in the countries where they operate, which can help you avoid costly mistakes and navigate cultural differences. This can lead to better decision-making and more efficient operations.
Is an EOR Right for Your Company?
While EORs offer numerous cost-saving advantages, they may not be the right solution for every company. Consider the following factors:
- Size of Your Company: EORs are generally a good fit for small to medium-sized businesses that lack the resources to establish their own legal entities abroad. Equally, EORs are great for both startups and multinational companies venturing into new markets.
- Number of International Employees: If you have a small number of international employees, the cost of using an EOR may not be justified.
- Industry and Location: The cost of using an EOR can vary depending on the industry and location of your international employees.
Conclusion
An EOR can be a useful partner in helping you cut costs and manage the challenges of hiring people internationally if you are looking to grow your workforce abroad. By carefully considering your company’s needs and choosing the right EOR provider, you can get the benefits of a global workforce, working across different time zones around the clock, while minimising risks and maximising cost savings.